Commercial Auto Rate Increases Jump 6%

The composite rate for commercial P&C and personal lines insurance both increased in June, according to MarketScout’s monthly market barometer. On average, commercial P&C lines in the United States increased at plus-5 percent, and rates on personal lines increased 4 percent in anticipation of an active hurricane season.

For commercial lines, all coverages, industry groups and account sizes held within a plus-1-to-minus-1 percent range as compared to May. Commercial auto had the highest rate increases at plus-6 percent. Property, general liability, directors and officers (D&O) liability and employment practices liability insurance (EPLI) followed at plus-5 percent. EPLI made the most significant upward rate adjustment in the last four months, the MarketScout report noted.

At plus-6 percent, accounts with less than $25,000 in premium were hit by the largest rate increases. Jumbo accounts, those more than $1,000,000 premium, received the best composite rates, at plus-2 percent. The contracting and service segments received the largest increases, at plus-6 percent.

“The market is steady right now,” said Richard Kerr, MarketScout CEO. “There were no big surprises in July 1 treaty renewals and even the impact of Superstorm Sandy seems to have been forgotten by most property insurers.”

Rates Summary for June 2013 by Coverage Class:

Commercial Property + 5 percent

Business Interruption + 2 percent

BOP + 4 percent

Inland Marine + 3 percent

General Liability + 5 percent

Umbrella/Excess + 4 percent

Commercial Auto + 6 percent

Workers’ Compensation + 6 percent

Professional Liability + 3 percent

D&O Liability + 5 percent

EPLI + 5 percent

Fiduciary + 2 percent

Crime + 2 percent

Surety + 2 percent

Rates Summary for June 2013 by Account Size:

Small Accounts + 6 percent

(Up to $25,000)

Medium Accounts + 5 percent

($25,001 – $250,000)

Large Accounts + 4 percent

($250,001 – $1 million)

Jumbo Accounts + 2 percent

(More than $1 million)

Rates Summary for June 2013 by Industry Class:

Manufacturing + 5 percent

Contracting + 6 percent

Service + 6 percent

Habitational + 4 percent

Public Entity + 2 percent

Transportation + 6 percent

Energy + 4 percent

Personal Lines

Homeowners and auto policies increased the same as last month, plus 4 percent and personal-articles floaters decreased slightly at plus 2 percent, compared to plus 3 percent the month prior.

“We are seeing an increased interest in the high-net-worth space,” Kerr said. “There are two major insurers considering moving into high-net-worth in a meaningful way. If they do, the increased competition could have an impact on rates.”

Rates summary for June 2013 personal lines:

Homeowners (less than $1,000,000 value) + 4 percent

Homeowners (more than $1,000,000 value) + 4 percent

Automobile + 4 percent

Personal Articles + 2 percent

MarketScout's analysis of market conditions is corroborated by pricing surveys conducted by the National Alliance for Insurance Education and Research and are driven mathematically by new and renewal placements across the United States, MarketScout said.